South Plains Financial Enters Houston Market with $106M BOH Deal
All-stock acquisition of BOH Holdings is expected to be 11% accretive to earnings per share by 2027, marking a major strategic expansion for the Lubbock-based lender.
South Plains Financial, the Lubbock-based parent company of City Bank, announced Monday it has agreed to acquire BOH Holdings, Inc. in an all-stock transaction valued at approximately $105.9 million, a strategic move that provides it a long-sought entry into the lucrative Houston market.
The deal, which marks a significant expansion for the West Texas lender, is expected to accelerate its growth and earnings potential. South Plains projects the acquisition will be 11% accretive to its earnings per share by 2027. Investors reacted modestly to the news, with shares of South Plains Financial (NASDAQ: SPFI) trading up nearly 1% to $38.15 in morning trading.
Under the terms of the agreement, South Plains will issue 0.1925 of its shares for each share of BOH Holdings, the parent of Bank of Houston. The transaction will result in the issuance of approximately 2.8 million new SPFI shares, giving former BOH shareholders around 14.5% ownership in the combined company. The deal is expected to close in the second quarter of 2026, pending regulatory and shareholder approvals.
“This acquisition is a significant and logical step in accelerating City Bank’s earnings power and executing on our strategic plan to expand our footprint within Texas,” said Curtis Griffith, Chairman and CEO of South Plains Financial, in a statement released Monday. “Bank of Houston has built an impressive, commercially-focused bank, and their deep ties to the local community will be invaluable as we enter this new market.”
The move provides South Plains, with its current market capitalization of approximately $614 million, a crucial foothold in one of the nation's most dynamic and diverse economic regions. Houston’s status as a major financial hub has made it a prime target for growing Texas banks looking to capture a piece of its substantial commercial lending and wealth management opportunities.
The combined entity will be a formidable regional player, with pro-forma assets of approximately $5.4 billion, $3.8 billion in loans, and $4.6 billion in deposits. As of September 30, 2025, BOH Holdings held $772 million in assets and $633 million in loans.
From a financial perspective, South Plains management emphasized the deal's attractive metrics, including a tangible book value per share earnback period of less than three years. This quick earnback is a key metric for investors, indicating a relatively swift path to realizing the deal's value.
Jim Stein, Chairman and CEO of BOH Holdings, expressed confidence that the merger would benefit both customers and shareholders. “Joining with City Bank will provide us with the resources and scale to accelerate our combined growth in ways that we could not achieve on our own,” Stein remarked. He highlighted the advantages of South Plains’ lower-cost deposit base and expanded product suite. Stein is expected to join the boards of directors for both South Plains and City Bank upon the deal's completion.
Cultural alignment was also a key consideration. South Plains President Cory Newsom noted that an extensive review of Bank of Houston’s operations revealed a consistent credit culture and underwriting philosophy. “When considering M&A opportunities, the importance of culture and values cannot be overstated,” Newsom said. “We are confident that we have found a great partner in Bank of Houston.”
The acquisition aligns with a broader trend of consolidation within the regional banking sector, where scale is increasingly critical for managing technology costs and regulatory burdens. For South Plains, this deal represents a pivot from organic growth to strategic acquisition to enter a new high-growth geography, a move that analysts view as positive for its long-term expansion strategy, despite the near-term shareholder dilution.